New Study: South Africa Autos Report Q2 2015

A strong sales performance over the final month of the year meant that total new vehicle sales in South Africa ended 2014 down by only 1.1% year-on-year (y-o-y), at 642,670 units. Breaking down the headline figure, passenger car sales were down by 2.5% y-o-y, at 439,264 units, while light commercial vehicle (LCV) sales grew by 2.3% y-o-y, to 173,190 units. Medium/heavy trucks and buses also grew, by 1.3%, to 30,301 units.

Looking forward, BMI is expecting the outlook for new car sales to improve somewhat over the coming year, although some challenges will remain. On the macroeconomic front, the recent rapid decline in global oil prices has provided some good news for the local economy and BMI's Country Risk team has made a small upward revision to its forecast for 2015 real GDP growth, which we now see coming in at 2.5% in real terms, up from 2.1% previously.

Lower oil prices will not only help growth, but should also lead to lower inflation within the country. BMI sees average price growth declining to 4.7% in 2015, down from an estimated 6.1% in 2014. The external accounts should also improve on the back of falling oil prices and we have recently decreased our forecast for the current account deficit in 2015 to 3.6% of GDP, from 4.7% previously. This will ease the pressure on the rand and although we still forecast depreciation against the dollar in 2015, it will come at a slower pace than was the case in 2013 and 2014.

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Along with the prospect for lower inflation, an improved outlook for the currency will decrease the likelihood that the central bank will tighten monetary policy, all of which will improve consumer and business sentiment. With regards to the interest rate outlook, we expect the SARB to keep the repo rate static at 5.75% over the coming 18 months, barring an unforeseen spike in inflation. This should help those South African consumers who require loans to fund a new vehicle purchase.

In another positive indicator for new car sales in South...

The South Africa Autos Report features the latest data and forecasts covering production, sales, imports and exports.

BMI Research's South Africa Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in South Africa.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on South Africa to test other views - a key input for successful budgetary and planning in the South African automotives market.
* Target business opportunities and risks in the South African automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Africa.

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